US Economy Slips as Tariffs Bite—Trump Still Claims It's Booming

Former US President Donald Trump has again taken to social media to praise his signature tariff policies, claiming they’ve turbocharged the American economy. In a post on X (formerly Twitter), Trump stated: “Because of tariffs, our economy is booming.” But recent economic data tells a very different story.

Since the beginning of 2025, several indicators suggest the US economy is under considerable stress. The US Dollar Index (USDX)—a key measure of the greenback’s strength against a basket of major currencies—has fallen by more than 10% this year alone. Back in January, the index hovered around US$110,000, but has since dropped to just US$98,000.

It’s not just the dollar that’s feeling the pressure. US consumer spending, a major driver of the nation’s GDP, declined slightly by 0.2% in May according to Bloomberg. The fall may seem modest at first glance, but economists argue it signals growing caution among households.

Further confirmation of the slowdown comes from the Personal Consumption Expenditures (PCE) Index, which fell by 2.1% over the same period. As a core measure of inflation and economic activity, a drop in the PCE suggests American consumers are not only spending less but are also feeling the pinch of higher prices and weaker purchasing power.

Tariffs Backfiring?

Despite the former president's upbeat rhetoric, experts warn that protectionist policies like tariffs can backfire in the long run—raising costs for consumers, disrupting global supply chains, and reducing competitiveness for American businesses.

In fact, some US companies are already voting with their feet. Apple Inc., for instance, has accelerated its move to shift production of iPhones to India, aiming to mitigate the ongoing impact of trade tariffs on Chinese-made goods.

“Tariffs are essentially a tax on Americans,” said one senior economist at a New York-based investment firm. “They may protect some industries temporarily, but they ultimately lead to higher prices, slower growth, and weaker international standing.”

The Bigger Picture

Trump’s tariff-first strategy has long divided economists and business leaders. While some support the idea of reducing dependency on foreign goods—particularly from China—others warn that over-reliance on protectionism could weaken the US’s long-term economic outlook.

For now, the numbers paint a sobering picture. The dollar’s decline, coupled with shrinking consumer spending and falling inflation metrics, suggests the American economy is not booming—it’s contracting.

Still, with Trump eyeing a potential comeback in the upcoming presidential election, tariff policy remains a key part of his economic playbook—and the debate over their true impact is far from over.

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